$70m boost for Mars’ US supply chain

Mars Chocolate North America plans to reinvest $70m in its US supply chain to ensure that more than 95% of its products sold in the US are made in the country.

Mars said it would boost production of its bestselling product, M&M’s, at its Kansas factory following news that US sales of the product increased more than 6% last year to more than $2bn, according to Euromonitor.

Mars also announced it would increase production at its Georgia facility, which makes goodnessknows, a healthy snack bar brand the company launched in 2015.

Mark Johnson, president of Mars Petcare North America, said the new investment in local manufacturing reflected a change in direction for the company.

“Our supply chain transformation will allow us to balance consumers’ unique, changing needs while continuing to meet demand for their most beloved products,” he said.

Market researcher Nielsen said it expects the better-for-you snack bar category will record a five-year compound annual growth rate of 5% to reach $6.8bn by 2019.

Mars Chocolate North America is the second largest chocolate seller in the US after The Hershey Company. The move comes after parent company Mars, Incorporated pledged to invest $900m in its sprawling US operations, which include packaged food and pet care.

Tracey Massey, president of Mars Chocolate North America, said the latest investment would create 250 new jobs.

“Mars believes in the value of keeping our operations in America – it’s good for our people, our business and our consumers,” she said.

According to MarketWatch, US companies have increasingly tried to draw more attention to their domestic investments since President Donald Trump vowed to protect manufacturing jobs and publicly criticised businesses that transferred jobs overseas.

During the presidential campaign, Mondelez International, a Mars rival that makes Oreo cookies and Milka chocolate, was singled out by Trump for shifting a portion of its Oreo production to Mexico, which he then vowed to boycott, according to Industry Week.

When asked whether the new investment was instigated by public scrutiny, Massey told CNBC that it stemmed from a longstanding belief in domestic manufacturing, rather than a desire to earn plaudits from the White House.

“It’s just our way of doing business,” she said. “We’ve been doing it for years.”

Mars’ US chocolate sales amounted to about $5.1bn last year, while the US chocolate market grew retail-value sales by 3.5% year-on-year in 2016 to reach $18.8bn, according to data from Euromonitor.